JOHANNESBURG (Reuters) -South Africa’s rand inched higher against a weaker dollar on Thursday, with the next big local drivers – inflation data and an interest rate decision – due next week.
At 1521 GMT the rand traded at 17.86 against the dollar, about 0.3% stronger than Wednesday’s closing level.
The U.S. currency was down about 0.2% against a basket of peers.
August consumer inflation figures on Sept. 18 will be closely watched, after July’s 4.6% reading neared the South African Reserve Bank’s targeted level, 4.5%.
Economists polled by Reuters predict the central bank will announce a 25 basis point rate cut on Sept. 19, as slowing inflation opens the door to the first easing step in more than four years.
Kavir Surujhlal, junior sales trader at IG Group, said the rand could be volatile over the coming weeks as markets digest the impact of the SARB rate cut.
Initially the rand could weaken, while further out the positive knock-on effects from the rate cut could boost the local currency, Surujhlal said.
The rand reacted little on Thursday to July mining numbers that showed another year-on-year output decline.
“With no significant data expected tomorrow, we anticipate a relatively quiet day if conditions remain unchanged,” said Wichard Cilliers, head of market risk at TreasuryONE.
On the Johannesburg Stock Exchange, the blue-chip Top-40 index closed up more than 1.1%. South Africa’s benchmark 2030 government bond was little moved, the yield at 9%.
(Reporting by Tannur AndersEditing by Alexander Winning, Alexandra Hudson)
